Buying an off-plan property is a popular alternative to buying re-sale homes. There are lots of advantages to buying new homes, as they haven’t aged with time or lost their appeal. Some might not even have started construction when you pay your reservation fee.
In this article, we’ll look at the benefits of buying a brand-new home overseas and explain the process so you can decide if it’d suit you.
When it comes to new build properties, I think of snazzy new apartment blocks, usually near a train station or commuter town – that’s a London local for you. But did you know that off-plan buying exists overseas?
In fact, there are a range of developers and contractors committed to expanding the horizons of popular areas by adding the option of fresh and modern residential community living.
If that sounds like something you’d like, read on for more information…
Add a personal touch
A huge selling point of buying off-plan, alongside the property being brand-spanking-new, is that you’re there for the decoration stage of the build. Therefore, the developers often allow the new buyers to customise the fixtures, fittings and furnishings. There are usually different packages to choose from, but there can be a huge amount of flexibility when it comes to tweaking the layout or opting for a pool.
Buying a furnished off-plan property can also save you money in removals, as the majority of furniture you need to live comfortably, will already be there. Allowing you to choose the sentimental items that you couldn’t live without to bring with you overseas.
Up to standard
The nature of buying a new-build home doesn’t just mean it’ll be nice and new, but the contractor has to abide by the most up-to-date building regulations which often incorporate energy-efficient materials. When buying a re-sale property, you’ll likely have to update a part of the property (perhaps a roof or windows) within a couple of years, but when buying new, there’s a 10-year structural guarantee. This means the developer is legally obliged to manage any structural faults that occur once you’ve taken possession.
Top tip: Before you make your final off-plan payment, make sure the property you’re buying has been thoroughly inspected and any defects have been highlighted to the developer. This is known as ‘snagging’ and it’s not uncommon to hire a professional building surveyor to do this for you.
Payment schemes and timescales
Construction time for off-plan developments varies, but anything from 12-24 months is common, while unexpected delays are not uncommon.
The first step in the buying process is paying a reservation fee. Typically, anything up to €7,000 will secure your chosen new home. Soon after, a sales contract will be signed, and your developer will require a deposit which is typically between 20-30%. Once paid, the payment schedule can be varied. Some developers request an additional 30% at an agreed building stage, while others may require nothing until completion.
The thing to note: Off-plan transactions usually attract VAT on top of the purchase price, rather than tax levied for a re-sale.
Investment Potential
Do your research carefully and there is a good chance your off-plan home purchase will rise in value. Investing in a unit during the off-plan or ‘pre-launch phase can increase your odds of benefitting from capital appreciation. The first few homes are usually priced attractively low to attract buyers. It also means, the earlier you interact, the better choice of homes on the development you’ll have.
To note: New properties tend to attract higher rental yields than older ones. If you wish to buy off-plan and rent it out – be careful, this is often not allowed contractually and there’s usually a clause that states you must wait a number of years to ‘flip’ the property.
Start your journey here, view all our latest overseas properties for sale in Europe > www.homesearch-overseas.co.uk
